Bloom Where You Are Planted

So today in the mail at work, I received a Christmas card from a client, with a $100 bill tucked inside. How nice!

This evening, my nephew unexpectedly handed me some cash, $310. (My nephew has been living with me for about 1.5 years. He has been having some health problems, some personal problems, and some financial problems. He hasn't been able to pay anything at all towards household expenses since April. Until today that is.)

Yay!!

Well, I paid Chase Freedom in full today. I am sad that my whole bonus plus more went to it, but on the other hand I am glad I was able to pay it.

Is the glass half empty or half full?

I was pleasantly surprised to read about the 2011 Fica Tax rate. It is going down from 6.2% to 4.2%. However, the Making Work Pay credit expires. That credit was worth $400. For some this will be a wash. Those who earn more than 20k will see a bump in their take home pay.

Now, how best to use it?

So we had our annual Christmas dinner, and it was an enjoyable evening as always. I did get a very nice bonus this year for $1750, which I felt was very generous. Also, it is just nice to feel that your efforts are appreciated!

So, I am considering how to best use it. It will almost pay the remaining balance on my Chase Freedom in full. However, I am leaning towards $1500 to Chase and $250 in my Roth. I do fret that I won't hit my Roth goal of 150k.

I realize I haven't really blogged about my income. I have an office type job and made 48k this year, including seasonal overtime and bonus. I also receive child support of 6k per year. It's not a huge income, but I am happy to have it. I have certainly lived on less.

Well tonight is bill paying evening, and I am encouraged by the difference 2 weeks of being careful with my spending has made already. I have just paid all of my bills for the month, made small savings account deposits, paid $500 towards Chase Freedom, and have 785.99 left. Not bad! I expect to hang on to about half of that, spend about half on groceries, gifts, and a few outings while son is out of school for Christmas break.

I still owe 1873.99 to Chase. Bleh. Hopefully, my Christmas bonus will take care of most of it.

I received a rewards check from my Chase Freedom card in the amount of $25. I intend to use it to take a little chip out of my mortgage.

Also, I received an email from HauserNet that I have been assigned a project and I should expect to begin receiving some decoy mail in the coming weeks. That income will also be used for mortgage chips.

I am going back and forth about using my theoretical Christmas bonus towards my Chase Freedom Visa bill 100%, or splitting it out 40/20/20/10/10 and transferring still more to my Bank of America Visa.

This Friday night, I will know for sure if my bonus is only theoretical or wonderfully real.

So yesterday I purchased my first Christmas gift of the season. I bought a Kinect Fun Package for my son. With tax and shipping, $283.

I will send my daughter a check. She is 20, living in another state, and will decide for herself how to spend the check.

Other than that, I am not certain if I am buying anything else. My boyfriend has been hinting that he can't afford much this year. So I may simply suggest we don't exchange gifts. My Mom and I never exchange gifts. My nephew cannot afford to buy gifts, though I may get him a little something anyway. I will help my son pick out something for his father. (At 20, my daughter can handle this herself if she chooses.)

Gifts just aren't much of a priority in my family.

I have dreamed of extensive foreign travel since I was a young girl. To date, I have done some traveling but not nearly as much as I would like.

In the US, I have seen the west and mid-west states very thoroughly, have cruised to Alaska, have visited Memphis, Washington DC, and the state of Virginia. Still quite a bit of the US I would like to see.

Internationally, I once spent 2 weeks touring Ireland, and 2 weeks touring China (different trips). Currently, I am saving towards visiting Egypt. I plan to take my son on this trip, my boyfriend, and my cousin. I will be paying for myself and my son only.

I have been thinking I need to have a standard allocation for extra income. I don't mean tiny amounts such as from decoy mail, but the occasional large chunk of extra money. In the past, I have decided on a case by case basis how to best use each cash infusion, but I want to stop doing that.

Here is my extra money allocation:

40% credit card debt
20% Roth IRA
20% regular savings
10% Egypt savings
10% mortgage

Once my credit card debt is gone, I will decide on a new allocation.

There is a reason I have been thinking about this lately. I usually get a Christmas bonus. I hope that will be true this year as well, but of course I can't count on it. Also, it is almost the time of year for seasonal overtime at my place of employment. I will literally be able to work all of the overtime I can stand for several months. The way it is handled is to record the overtime, then pay it all in one sweet check at the end of the high-volume period. In addition, a bonus is traditionally paid.

I have received my Chase Freedom card statement, and it is big again. This is no surprise, I already knew it would be. I had been thinking I would cash flow it (I expect to be able to do that, no transfer from savings required), but now I am thinking I won't. I am thinking I will do a balance transfer one last time, making my B of A Visa bigger yet.

I am determined that this will be my last big statement.

I have set some specific financial goals which I would like to reach before retirement. Reaching them is possible, though not a slam-dunk. This is another big reason I decided I had to get my over-spending in check. Here they are:

1. Have 600k in traditional IRA. This is for regular monthly income. At a 4% withdrawal rate, 600k would provide 24k annually (2k monthly) of income. Supplemented by SS benefits, this should afford me a modest yet comfortable existence.

2. Have 150k in Roth IRA. This money is for covering large irregular expenses which will come up from time to time. Home repairs, home maintenance, vehicle replacement. The point of having this fund is so I can (hopefully) avoid debt.

3. Be mortgage free. I am uncertain at this point if this will be in my current home, or if I will sell and move elsewhere. Wherever I am living, I would like to not have a mortgage.

I am single, so this nest egg is intended to support only one person.

Today is my Mom's 78th Birthday! I am taking her to dinner at her favorite restaurant tonight. My son, my nephew, and my boyfriend will also be going. I will be paying. :P

My Mom lost her second husband this year. She and my Dad were married for 34 years (they married very young) before she was widowed. She was married to her second husband for 28 years and now she is a widow again. I am just glad to still have her!

I have noticed that we hardly ever watch regular TV. Since Lost concluded, there's just not much on that's a priority. We love our Netflix account, we use that quite a bit, and it is very economical. So I called and cancelled, and that means I now have an extra $40 a month.

I'm working on my budget and will post it soon. I imagine that Mint will point out what is realistic and what works, and that will help me fine-tune as I go along.

Brown-bagged it again today, shaping up to be another no spend. Although, I did give my nephew $3 for bus fare this morning.

I discovered mint.com tonight. So far, I love it! We will see how I do.

I stopped at the grocery store on my way home from work. I spent $43.44.

I just experienced sticker shock at the pharmacy. I have a new Rx from my doctor, it is one I will be taking from now on. After insurance, my cost is $127.51. Yikes! I asked if there is a generic, there is not. The pharmacist suggested my doctor could prescribe something similar. I hope so, because it is not life or death so I am not paying $127.51 every month for it. I left the pharmacy without it.

I did pick up my other Rx ($10, now that's more like it) and 2 bottles of conditioner on sale, as well as an over-the-counter allergy medication and 2 pair of mittens. Grand total $35.96.

I did not go out for lunch. Again!

Third no spend day in a row. Yay!

Although, I did part with some funds. I paid a utility bill. I don't think that counts as spending, does it?

I also deposited my coins into the savings account I refer to as my piddly account. There is nothing in it but coins from my wallet, plus interest.

Tomorrow I have to pick up my prescriptions and I need to buy some conditioner, so tomorrow will not be a no spend day.

Years ago, I was a decoy mail agent. Following my divorce, I moved to a new zip code (same city) and so I lost my spot. I have since checked periodically to see if they need a new agent in my zip code.

Well....they finally need me! I received my confirmation today; I am officially an agent again. It will likely take some time to build my volume again, but eventually I will make a few hundred dollars a year for something which takes only a few seconds of my time. Yay!

I intend to use this extra cash to chip away at my mortgage.

This blog must be helping, because I did not spend a single cent either today or yesterday! Tracking is very easy when you have spent $0.

I have a Chase Freedom card which I use for day to day purchases such as gasoline. I also have a few recurring charges automatically billed to it, such as my newspaper subscription and Netflix. I try to keep the total charges to $500 or less each month. In each of the last 3 months, I have gone way over and had more charges than I could pay. In each of the 3 months, I transfered the unpaid balance to my Bank of America Visa, which offered me 1.99% until July 2011. When my promotional rate ends, my rate will be variable. At the moment, my variable rate is 7.24%. I really want to get this paid off. I owe $4,460.69 to Bank of America.

I have a Chase Freedom card which I use for everyday purchases such as gasoline, and also have a few recurring charges billed. I try to keep my total charges to $500 or less each month. The past several months, I have charged more than I could pay, so I transfered the unpaid balance to my Bank of America Visa, which offered me 1.99% until July 2011. When the promotional rate ends, my rate will be variable. Currently, my rate would be 7.24%. I currently owe $4,460.69.

My retirement nest egg is in three different accounts: a traditional IRA, a Simple IRA (employer's plan), and a Roth IRA.

My plan is to eventually use my tax-deferred monies for regular monthly income, and to use my Roth for big-ticket items such as a new roof or vehicle replacement.

Here is my current situation:

Traditional IRA (held at Wells Fargo):
Vanguard Total Stock Market ETF $38,257.36
Vanguard Small Value ETF $7,955.75
Vanguard All World Ex US ETF $29,988.00
Vanguard Total Bond Market ETF $20,150.00
iShares Tips Bond Fund ETF $9,985.68
cash $78.58
Total: $106,415.37

Simple IRA:
American Funds Target Ret 2030 $9,625.80

Roth IRA (held at Vanguard):
Vanguard Target Ret 2025 $7,663.43

I currently owe $184,133.12 on my mortgage. I have a 30 year loan, fixed at 5.25%. The principal and interest portion is $1060.23. Most months, I round my payment up just a little. I have made 32 payments, and by prepaying have eliminated the very last scheduled payment, and have reduced the next to last scheduled payment to $783.02.

Like most people, my house is worth less than I owe on my mortgage.

I am somewhat embarrassed to admit, in all my adult years, I have never tracked my cash spending. I know I have to rectify this, as I have been overspending. I need to cut it out. In the past few months, I have taken on some credit card debt. There was a time in my life when I was swimming in credit card debt, but had been completely free of it for the last decade or so. However, I can no longer say that.